- Traders cautious ahead of Fed decision. (10:28am ET) The S&P 500 is modestly lower this morning after advancing Friday, led by utilities (+0.8%) and telecom (+0.7), but snapping a six-week winning streak. Energy (-0.1%) lagged, but held up well given the 1.6% drop in the price of oil. Investors are trading cautiously ahead of the Federal Open Market Committee (FOMC) meeting, which begins tomorrow; the market has priced in a 25 basis point (0.25%) rate hike. Overnight, Asian markets were led higher by the Hang Seng (+1.1%) and Shanghai Composite (+0.8%); Korea’s KOSPI (+1.0%) continued to climb after the country’s president was removed from office on Friday. European exchanges are mostly higher in afternoon trading, with the STOXX Europe 600 up 0.4%. Meanwhile, WTI crude oil ($48.30/barrel) is higher after last week’s slide, COMEX gold ($1203/oz.) is up modestly, and the yield on the 10-year Treasury note is up 0.01% to 2.59%.
- Busy week ahead in a very busy month. As we noted in our recent Weekly Economic Commentary, March 2017 is an unusually busy month for global markets. Thist week, the FOMC meeting, along with Bank of Japan and Bank of England meetings, are accompanied by an election in the Netherlands, a press conference by Chinese Premier Li, and a ton of key U.S. economic data (retail sales, CPI, housing starts, leading indicators). President Trump will release his fiscal year 2018 budget document, the G-20 finance ministers meet in Germany, and the U.S. will hit its debt ceiling.
- FOMC preview. In this week’s Weekly Economic Commentary, we ask and answer key questions that investors may have about the Fed and monetary policy ahead of the Federal Open Market Committee (FOMC) meeting. With a 0.25% rate hike fully priced in, markets will want to gauge the pace and timing of rate hikes over the rest of 2017 and into 2018, as well as Fed Chair Yellen’s thoughts on fiscal policy and the impact on monetary policy.
- How much does the current bull market have left in the tank? The bull market celebrated its eighth birthday last Thursday, March 9. During that eight-year period, the S&P 500 rose 250% in price and more than tripled in value (including dividends), leaving many to ask the question: How much does this bull run have left? We try to help answer that question in our latest Weekly Market Commentary, due out later today, by looking at some of our favorite leading indicators. Although valuations are rich and policy risks are high, none of our favorite leading indicators are sending signals suggesting the bull market is nearing its end.
- The weekly win streak is over. The S&P 500 ended with a slight gain on Friday to close the week down 0.4% – just missing out on the first seven-week win streak since late 2014 and ending a six-week win streak in the process. The big move last week came in crude oil, as it sank more than 9% for the week – the largest weekly loss since right before the election. Small caps, as measured by the Russell 2000, fell 2.1% and high yield also saw a big drop. Many have noted that weakness in energy, small caps, and high yield could be a warning sign for large caps. We will continue to monitor these developments.
- ECB’s Mario Draghi Speaks in Frankfut
- China: Retail Sales (Feb)
- China: Fixed Asset Investment (Feb)
- China: Industrial Production (Feb)
- Empire State Mfg. Report (Mar)
- CPI (Mar)
- Retail Sales (Mar)
- FOMC Decision (Rate Hike Expected)
- FOMC Economic Forecasts and “Dot Plots”
- Yellen Press Conference
- General Election in the Netherlands
- China’s Premier Li Holds Annual Press Conference
- Philadelphia Fed Mfg. Report (Mar)
- US Debt Ceiling Reinstated
- President Trump to Release His FY 2018 Budget
- UK: Bank of England Meeting (No Change Expected)
- Japan: Bank of Japan Meeting (No Change Expected)
- Index of Leading Indicators (Feb)
- G20 Finance Ministers Meeting in Germany